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Post by morningglory on Mar 15, 2012 8:54:11 GMT -5
Reading through the threads about tossing it all out at once has inspired me to go on a tossing rampage. I think I can make a good dent with this mindset.
Here's what I need advice about:
Do I need to hang on to all my tax records indefinitely? I had once heard you only need to keep five year's worth. Then I heard that the IRS never forgets, so it is important to have everything going back forever. Maybe if I just keep the tax returns, themselves, without all the supporting evidence? Or are those the documents that I actually need? (This might seem a minor issue, but I have about 30 years worth of tax documents, including for years where we had our own businesses and a year we had to make an Offer In Compromise.)
Do I need to keep old mortgages? We refinanced twice, so can I just throw away the previous mortgage documents?
Do I need to keep old loan papers, old rental agreements, old employee contracts, old car registrations, etc? I seem to have a concern with keeping any legal or contractual information!
Should I keep years worth of correspondence from childhood friends? In particular, I corresponded with a friend from middle school who developed schizophrenia. It was important to her family that I remained in touch with her all those years. But the letters are mostly typical young girl/early adult stuff, except that they were sometimes colored by her illness. I don't really think they will be useful to anyone, even her or her family. Think I should go ahead and toss them?
A lot of the stuff I hang on to because I seem to have this idea that I am an archivist or curator. I always imagine that someday these papers will be used to understand the 20th/21st century, how much things cost, what daily life was like, etc. It's really ridiculous, but those thoughts have actually been in my mind since I was a child! I would like to overcome this tendency, because I don't see why I should have to pay the toll it takes on my life in order to curate this dubious collection of junk that will probably get thrown out when I die, anyway (if it is even still intact by then).
Thanks for any ideas on this!
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Post by morningglory on Mar 15, 2012 9:10:23 GMT -5
A few years ago I made a huge step in getting myself to feel OK throwing away something that was not in good condition. So I could go through a pile and weed out whatever was really not worth saving.
NOW I need to take another big step and go through a pile only looking for those things that NEED to be saved, and feel OK getting rid of ALL the rest, whether it is in good condition or not!
Right now there is a pile of laundry in the basement that has sat there for years, literally. Periodically I realize that something in the pile has deteriorated to the point where it should be thrown away and eventually I do that. NOW I plan to go through that whole pile and only SAVE anything that we really, really, really could make good use out of. My suspicion is that it won't be much, if anything that falls into that category!
That will be a step toward preparing for he washing machine repair guy to come in. HA!
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Post by CourageouslyLion SeeksSerenity on Mar 15, 2012 9:15:54 GMT -5
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Post by Deleted on Mar 15, 2012 9:23:15 GMT -5
Morning....everything you talked about I would throw out. I keep three years of taxes at a time. As for the pile of laundry....if it's been sitting there for a year, there is nothing in it you really need. Throw the whole pile, and don't go through it (that will only slow you down and mire you in more decision making). YOU GO GIRL!!!!!!
One more tip...forget shredding....it'll take you forever. Just throw it out....seriously, get it out. While there is some small possibilty of identity theft, when I threw out 20 years of tax papers without shredding I was JUST FINE. Do not fall prey to paranoia, which will keep you mired in stuff.
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Post by PaperGrace on Mar 15, 2012 9:37:57 GMT -5
Were we separated at birth? A lot of the stuff I hang on to because I seem to have this idea that I am an archivist or curator. I always imagine that someday these papers will be used to understand the 20th/21st century, how much things cost, what daily life was like, etc. It's really ridiculous, but those thoughts have actually been in my mind since I was a child! HJ has a good point about getting papers out. When I was keeping a lot of papers that I felt should be shredded, a bunch of people jumped in with shredder alternatives: tear them and soak etc... I brought some to my dad, he's been burning them in the woodstove in the mornings.
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Post by morningglory on Mar 15, 2012 9:59:17 GMT -5
Courageously: Thank SO much! I know I have seen those posts before, but I had forgotten where and how to find them!
Hurricane: I KNOW you are right about that laundry. I guess I still feel that if I am transferring it all to a big black garbage bag (with rubber gloves!), and I see something like an acrylic blanket knitted by my grandmother, I would pull it out and wash it.
But you are so right--now that you point it out to me, I realize that there could not be anything in a pile of basement laundry that we would REALLY, REALLY USE and that couldn't more easily be replaced with a new one. Thanks for making me face that!
I guess I should transfer my plan to keep only what we will really, really use to the six or seven baskets of clean laundry sitting in my living room!
PaperGrace: I guess you knew that the shredding thing would be one of my obstacles! I like the idea of soaking them. If they are not TOO sensitive, I just tear them two or three times by hand. I'd LOVE to be able to burn them; that would be very satisfying.
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Post by morningglory on Mar 15, 2012 10:09:15 GMT -5
OK, so the IRS info is here at www.irs.gov/publications/p552/ar02.html#en_US_publink10008614. It says: How Long To Keep Records
You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.
The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Table 3 contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.
Table 3. Period of Limitations
IF you... THEN the period is... 1 Owe additional tax and (2), (3), and (4) do not apply to you 3 years 2 Do not report income that you should and it is more than 25% of the gross income shown on your return 6 years 3 File a fraudulent return No limit 4 Do not file a return No limit 5 File a claim for credit or refund after you filed your return The later of 3 years or 2 years after tax was paid. 6 File a claim for a loss from worthless securities 7 yearsSo it would appear that the longest one would have to keep tax records is 7 years. . .EXCEPT what if they try to accuse you of filing a fraudulent return? It would seem you have keep your records forever in case that would happen. On the other hand, I can ask myself what the chances are that the IRS would bother to go back over 7 years to drum up a (false) charge of fraud, considering how little our income has been! I mean, if they are going to worry about fraud, I would think they would examine the high rollers. On the third hand, I feel tempted to keep the tax records for now, and defer the decision for later! This is one of my patterns. . .
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Post by morningglory on Mar 15, 2012 10:13:14 GMT -5
OK, looking at that list again, I think I would be pretty safe just keeping tax records for three years, just in case there might be an error or something overlooked (either owed to the IRS or due us as a refund). I will feel very nervous but also relieved throwing out all those records from 30, 25, 20, 15, 10, and 5 years ago!! I'll post once I have done that. . .
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Post by morningglory on Mar 15, 2012 10:15:40 GMT -5
Some of the links in the old thread are dead. I found this list: www.bankrate.com/finance/personal-finance/how-long-to-keep-financial-records.aspxReading that list, realize that a lot of that advice is obsolete in the internet age. I almost never even use checks anymore (but I still have tons, cancelled and unused, from previous decades and closed accounts!). I can look online to see if my payments have been received, so I don't feel so pressured to keep all those bills anymore. Of course this also applies to the information I have stored over the years. I no longer need to keep files on all kinds of subjects, because I can always Google it! Same for catalogs. I have file folders full of catalogs of various types of products. That's how we did it before online shopping!
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Post by PaperGrace on Mar 15, 2012 10:17:21 GMT -5
Out Taxes Out!
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Post by Deleted on Mar 15, 2012 10:20:01 GMT -5
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Post by morningglory on Mar 15, 2012 10:20:54 GMT -5
Thanks for the encouragement, PaperGrace and Hurricane. Now I am REALLY motivated to attack those tax files and basement laundry pile. Will report back!
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Post by Deleted on Mar 15, 2012 10:24:11 GMT -5
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Post by CourageouslyLion SeeksSerenity on Mar 15, 2012 11:03:25 GMT -5
This is pretty much a rule for most financial things. .. save them X number of years from the last correspondence about that thing. (the X number of years is whatever is recommended).
For example for the IRS:
Whatever time limit you choose, (3 yrs, 7 yrs, 10 yrs)... make that be since the last transaction about that year.
So ... for example: tax year 2002:
If May 2007 was your last transaction/correspondence about the 2002 taxyear -- then for taxyear 2002, start counting from May 2007.
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NOTE: regarding the IRS, they have all your old returns and W2s in their computer, going back 10 years.
If you need a copy of old returns going back 10 years, you can just ask them for a copy.
If you need your old W2s to file old years you never filed, just ask the IRS for the old W2s. Much quicker than hunting through boxes for old W2s! I've done this and it works!
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Post by CourageouslyLion SeeksSerenity on Mar 15, 2012 11:16:06 GMT -5
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Regarding CLOSED & PAID credit card accounts And also Closed&PaidOff LOANS:
If the account is closed and fully paid off, then save the final documentation that it's paid in full. You don't need the entire history of the account. You just need proof that it's paid off.
AND ,, if WHILE your account was OPEN, they gave you a new card # or new account # -- (because they changed the account or sold the loan, or because you lost your old card, or for any other reason)... SAVE one document from each acct # so that you can prove that it's all ONE account.
WHY?
1) because these companies do computer upgrades, sell accounts, etc. You cannot rely on their computer archives for accuracy.
and
2) because creditcard and loan companies are constantly buying and selling old debts to other collection companies. Sometimes one of your PAID debts will show up on a list of accounts sold to a collection company. Even if it's very old paid years ago!
Bottom line: you want to keep all account numbers associated with the loan or card, plus proof that it's paid off in full. That would be maximum 3 pieces of paper per account. Keep that forever.
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